Franklin Templeton Quarterly Report - Equity Report - August 2012

Equity Markets - A Perspective

2

Agenda

Market Environment
– Global and India
FT Funds
– Franklin India Bluechip Fund
– Franklin India Prima Plus
– Franklin India Flexi Cap Fund
Summary

4

Global markets: Sentiment improves
2011 2012YTD
15 12.78 11.53
9.68 8.38
10 6.79
5.51 5.536.48 4.71
2.84 3.94 3.20
5
0
‐5
‐4.36
‐10
‐9.41 ‐9.58
‐15
‐20 ‐17.34
‐20.41 ‐19.16
‐25 ‐21.68
‐24.64
‐30
MSCI AC Dow Jones S&P 500 Nikkei FTSE MSCI EM MSCI AC BSE SSE Jakarta
World Eurotop AxJ Sensex Composite Composite
100
Source: Bloomberg, Stock Exchanges. As of July 30, 2012

Hopes of stimulus measures and receding worries around Eurozone crisis helped global equities
rebound
Gains in EM economies curbed by concerns about growth slowdown
India has managed to outperform peers and developed markets (local currency basis)

5

Global issues : De-leveraging & Europe

Source: Thomson Reuters, Credit Suisse Research Source: IIF

Banks and consumers are reducing leverage and governments are looking to adopt
austerity measures – impacting growth
Europe :
Economic data remains weak
Policy newsflow has turned positive

6

India Markets: 2011/12

Trend in FII flows into equities ($ mln)
35000
% returns 2012YTD* 2011 29321
30000
BSE Sensex 11.53 -24.64
25000
S&P CNX Nifty 13.08 -24.62 17783
20000 17639
S&P CNX 500 14.70 -27.19 15000
10799 10519
CNX Midcap 17.29 -31.00 10000 8064

BSE Smallcap 16.18 -42.61 5000

0
Source: BSE & NSE. *As of July 31, 2012 -512
-5000

-10000

-15000 -12179
2005 2006 2007 2008 2009 2010 2011 YTD 2012

Source: SEBI, As of July 31, 2012

In recent months, global developments along with concerns about domestic policies have
weighed on the markets.
Indices are broadly trading above 2011 end levels with mid/small cap stocks outperforming
Amongst sectors, tech/telecom stocks have underperformed
FII flows have picked up since mid/late June and, are quite strong for 2012 - +$10.5 bln

7

India Economy: Growth slowdown
Key drivers - GDP growth IMF Growth Projections – July 2012 Outlook
% GDP growth 2012 2013
World 3.5 3.9
Advanced 1.4 1.9
Economies
- US 2.0 2.3
- Euro-area -0.3 0.7
- Japan 2.4 1.5
Developing 5.6 5.9
Economies
- Brazil 2.5 4.6
- India 6.1 6.5
Real GDP at market prices. Source: CLSA Asia-Pacific Markets, CEIC. As of July 2012
- China 8.0 8.5

Despite slowdown, growth rate still remains ahead of many peers
Weakness largely due to slowdown in investment (combination of policy issues, interest
rates and slowing growth)
Persistently high inflation levels is weighing on household savings

8

Concerns: Inflation
Inflation Trends (WPI Headline/WPI Core/CPI)

Source: CEIC, Ministry of Commerce & Industry – Office of the economic advisor, CLSA Asia-Pacific Markets

Inflation:
Headline numbers moving up due to food prices – further rainfall deficit can add further pressure
Weakness in rupee has added imported inflation pressures – global energy prices have been under
pressure
Core inflation is trending lower

9

Concerns: Twin deficits

Fiscal Deficit
Fiscal consolidation interrupted by global financial crisis – stimulus only partially rolled back
For FY13 government has projected lower deficit, but depends on revenues and ability to curb subsidies.

Rs. bn FY13P FY12 FY11 FY10 FY09 FY08 FY07 FY06
Revenue 9774 7968 8237 6060 5470 5858 4408 3593
Expenditure 14909 13187 11973 10245 8840 7127 5834 5057
Fiscal Gap -5136 -5220 -3736 -4185 -3370 -1270 -1426 -1464
Fiscal Gap (as % of GDP) 5.1% 5.9% 4.9% 6.5% 6.0% 2.5% 3.3% 4.0%

Source: Budget Documents, CIRA
Current Account Deficit (CA Deficit):
Has worsened in recent times mainly due to expansion in gold imports
Lower crude prices and fall in gold imports could help narrow deficit in FY13
$ bn FY12 FY11 FY10 FY09 FY08 FY07 FY06
Exports 310 250 182 189 166 129 106
Imports 499 381 301 309 258 191 157
Invisibles 112 85 80 92 76 52 42
CA Deficit (% of GDP) -4.2% -2.7% -2.8% -2.3% -1.3% -1.0% -1.2%
CA Deficit excluding -1.0% -1.3% -1.6% -1.5% -0.9% -0.4% -0.7%
gold (as % of GDP)
Source: RBI, IIFL. Excluding gold reflects net gold imports

10

India: Key Drivers – Consumption & Infrastructure Spend

Population Profile Trend in infrastructure spending

Source: UN-World Population Prospects, CLSA Asia-Pacific Markets, Dec 2011 Source: Morgan Stanley Research, Sep 2011

Economy will benefit from positive demographic trends
Higher share of working age population
Rise in income levels to boost consumption
Infrastructure spending has slowed in recent times.
Will remain a key driver, as addressing infrastructural bottlenecks is critical to sustain economic growth

11

India: Key Drivers – Savings

Trend in Savings and Investment

Source: CSO, Citigroup. As of Feb 2012

India’s high savings ratio is a positive, given the large financing needs
Can facilitate high investment rates without adding to current account deficit
Need to encourage flows into productive financial assets
High share of household savings in physical assets such as gold and real estate
Statutory investment requirements in government securities means a significant share of
private savings is diverted to fund deficit

12

Corporate India: Faring relatively well
Corporate India’s Profits: Less volatile than most markets
India Earnings Growth (%)
MSCI Index/ Trends in EPS Standard Annual Coefficient
Growth over 15 years Deviation EPS of variation
growth
India 14% 8% 1.75
China 42% 1% 30.52
Brazil 40% 10% 4.02
Russia 431% 13% 33.32
EM 28% 7% 3.79
ACWI 31% 6% 4.01
US 31% 6% 5.29

Source: FactSet, MSCI, IBES Estimates, Company data, Capitaline, Morgan Stanley DM 32% 6% 5.25
Research. May 2012 Source : Capitaline, CEIC, MS Research. As of Jul 2012

Despite challenges, Corporate India Gross debt/equity for more than 9,000 listed Indian companies
continues to deliver healthy earnings growth
Balance sheets remain in good shape - some
capital intensive sectors/companies
exceptions
Environment ideal for bottom up stock pickers

Source : CMIE, ACE Equity, CLSA Asia-Pacific Markets As of Jan 2012

13

India Currency: Recent Weakness
INR has weakened considerably

Source: JP Morgan

Rupee’s sharp decline mainly due to widespread risk aversion in global markets
Currencies of other nations with current account deficits also exhibited sharp volatility
Policymakers have taken steps to boost capital flows – revised guidelines on GAAR awaited
Weak rupee could boost export competitiveness

14

Market Valuations

Key Valuation Metrics – BSE Sensex (as of Aug 9, 2012)
Current Median Current/ Current as SD Markets are trading below long-term
Median from Average
averages both on absolute & relative
PE (trailing) 14.8 16.6 0.9 -0.6 valuation basis
12M Fwd PE 12.5 13.2 0.9 -0.3
P/B 2.2 2.4 0.9 -0.4
Dividend Yield 2.2% 2.1% 1.1 0.1
P/Cash 10.2 10.1 0.9 -0.2
P/Sales 1.2 1.3 0.7 -0.6
EV/EBIDTA 8.4 10.5 1.0 -1.0
Note: Median/Average for BSE Sensex since Dec 1992

Source: Factset, MSCI, Bloomberg, Morgan Stanley Research.
*Data as of July 12, 2012

15

What should investors do?

Invest for the long term
Oft repeated cliché – but a simple and effective way to invest in equity markets
While markets always fluctuate the possibility of losing money always diminishes as the investment
horizon increases

Maximum Minimum Average of Possibility of Possibility of
Returns Returns rolling returns making money losing money
1 year 264.77% -56.26% 17.95% 61.30% 38.70%
3 years 62.16% -18.52% 13.09% 76.85% 23.15%
5 years 47.22% -7.81% 11.92% 84.54% 15.46%
7 years 29.34% -7.55% 11.91% 86.87% 13.13%
10 years 20.69% -2.81% 10.72% 97.51% 2.49%
Annualized and Compounded Returns on BSE Sensex; Period – 02-Jan-1991 to 31-July-2012. Source: BSE.

16

What should investors do?

Stay invested during volatile times – timing the markets is futile
Market moves tend to be sharp and quick over shorter time frames
Hence missing a few of the best days in the market can reduce overall return potential

Period of investment – 10 Average annual return on
years ended July 31, 2012 the BSE Sensex
Stayed Fully Invested 19.14%
Missed the best 5 days 13.85%
Missed the best 40 days -3.66%
The table is for illustrative purposes only. Source: BSE.

18

FT: Equity Funds

FT has a broad range of equity funds to suit the current environment and future opportunities

All these funds focus on long term fundamentals and stock picking – essential to identify
quality companies in this environment

The equity fund range consists of funds that have a performance track record of around 19
years and core investment team has remained unchanged for most of this period.

Fund Investment focus Inception date
Franklin India Bluechip Fund Invests in large cap companies December 1, 1993

Franklin India Prima Plus Primarily a large cap fund with some September 29, 1994
allocation to small/mid cap stocks that have
high growth potential
Franklin India Flexi Cap Fund Invests in companies across the market March 2, 2005
range

19

Franklin India Bluechip Fund

Fund Description Open-end fund with clear focus on large cap companies, Growth Blend Value
irrespective of market conditions
Large
Inception Date December 1, 1993
Medium
Assets Rs. 4,802.65 crores (July 31, 2012)
Small
Managed by Anand Radhakrishnan, Anand Vasudevan
Style Consistency
Investment Style Blend of ‘growth’ and ‘value’

Salient Points One of the oldest funds with a consistent
performance track record across market cycles – 19
year track record!
Remains true to its label
Normally has about 35 to 40 stocks in its portfolio
Adopts a buy-hold strategy and has low portfolio
churn ratio
Suitable as a core holding for all equity portfolios

Source: Morningstar From Dec’93 to Jul’12

20


Top 10 holdings Sector Share of Top Sector Allocations Share of
equity AUM equity AUM

ICICI Bank Banks 8.10% Banks 25.84%
Bharti Airtel Telecom – Services 6.75% Telecom - Services 9.02%
Infosys Software 5.80% Pharmaceuticals 8.91%
HDFC Bank Banks 5.14% Software 8.53%
Grasim Cement 4.66% Power 7.07%
Reliance Industries Petroleum Products 3.87% Petroleum Products 5.93%
Oil & Natural Gas Oil 3.27% Cement 5.88%
Corporation
Consumer Non Durables 5.71%
Kotak Mahindra Bank Banks 3.01%
Auto 4.19%
Dr. Reddy's Pharmaceuticals 2.86% Oil 3.53%
IndusInd Bank Banks 2.78% Rest 15.39%
Total 46.24% Total 100.00%
As of July 31, 2012

These securities represent the ten largest holdings held in the Fund as of the date indicated. These securities do not represent all of the securities purchased, sold or
Recommended for advisory clients, and the reader should not assume that investment in the securities listed was or will be profitable. Holdings are subject to change.

21


Long-term Cumulative Fund Performance (as of Jun 29, 2012)
Refer Annexure for detailed performance disclosures
Growth Option NAV as at June 29, 2012: (Rs.) 209.5208 Fund Manager: Anand Radhakrishnan, Anand Vasudevan
Growth Plan NAV Per FIBCF BSE Sensex S&P CNX Nifty
Unit (Rs.)
Last 1 year (Jun 30, 2011 to Jun 29, 2012) 216.5858 -3.26% -7.51% -6.53%
Last 2 years (Jun 30, 2010 to Jun 29, 2012) 196.4388 3.28% -0.77% -0.32%
Last 3 years (Jun 30, 2009 to Jun 29, 2012) 151.4629 11.42% 6.34% 7.15%
Since inception till Jun 29, 2012 10 23.46% 9.38% 9.32%
Current Value of Standard Investment of Rs. 10000 invested at the beginning of the period
Last 2 years 10,666 9,847 9,937
Last 3 years 13,833 12,026 12,302
Last 5 years 14,710 11,897 12,224
Last 10 years 95,454 53,718 49,905
Last 15 years 308,854 40,953 44,271
Since inception as on (1.12.93) 502,687 52,946 52,372
Past performance may or may not be sustained in future. Load is not taken into consideration. Dividends assumed to be reinvested and
Bonus is adjusted. Refer annexure performance of other funds managed by the fund manager/s. Returns greater than 1 year period are
compounded annualized.

22


Market Resilience (as of Jun 29, 2012)
Date FIBCF BSE Sensex S&P CNX Nifty
% change % change % change
Inception 1-Dec-93 N.A N.A N.A
Initial Rise 12-Sep-94 91.50% 40.66% 37.40%
Fall 04-Dec-96 -38.22% -40.72% -43.09%
Rise 05-Aug-97 47.01% 65.68% 61.54%
Fall 20-Oct-98 18.07% -39.22% -36.48%
Tech rally peak 11-Feb-00 233.94% 114.66% 117.14%
11/9 impact 21-Sep-01 -47.94% -56.18% -51.36%
Recovery 14-Jan-04 279.97% 138.22% 132.05%
India Re-rating 10-May-06 118.15% 103.62% 89.40%
Precrisis Peak 08-Jan-08 57.86% 65.50% 67.49%
Fall after peak 09-Mar-09 -54.97% -60.91% -59.08%
Market Peak 09-Nov-10 165.08% 156.51% 144.90%
Current 29-Jun-12 -9.84% -16.73% -16.23%
Returns since inception* 29-Jun-12 23.46% 9.38% 9.32%

Past performance may or may not be sustained in future. *Compounded and annualized. Dividends are assumed to be reinvested
and bonus is adjusted.
Refer annexure for performance information of other funds managed by the fund manager/s.

23


Performance Attribution By Sector - 1 year ended July 2012

Telecommunication Services ‐3.08
Utilities ‐1.11
Industrials ‐0.81
Information Technology ‐0.36
Energy 0.17
Cash & Other Net Assets 0.64
Consumer Discretionary 0.79
Health Care 0.80
Consumer Staples 0.87
Materials 1.62
Financials 1.93

‐4.00 ‐3.00 ‐2.00 ‐1.00 ‐‐ 1.00 2.00 3.00

Past performance does not guarantee future results. Source: FactSet.

24

Performance Attribution By Stock – 1 year ended July 2012
Top Three Contributors

Grasim Industries One of the largest players in cement and monopoly in viscose staple fibre in India
Is a value buy within the cement space and its VSF business offers downside
protection during downcycles in cement
Kotak Mahindra Bank Well positioned to take advantage of the ongoing rise in financial inclusion and shift
in savings preference from traditional bank deposits to market linked instruments
HDFC Bank Amongst the largest Indian private banks and have a strong retail franchise
Bet on rising penetration of financial services

Bottom Three Contributors
Bharti Airtel Leading wireless telecom services company and a play on rising penetration of
data/broadband connections
Could benefit from any consolidation in the industry
Regulatory uncertainty has weighed on the stock and sector
Crompton Greaves Engineering solutions company and a play on the long-term investment story
Stock has been impacted by capex slowdown and stiff competition concerns

Infosys One of the largest software companies in India and a key beneficiary of the
outsourcing trend
Stock has been under pressure as challenging demand environment weighs on
earnings

Past performance does not guarantee future results. Source: FactSet. Information is historical and may not reflect current or future
portfolio characteristics. All portfolio holdings are subject to change. The information stated above does not constitute an investment advice or
recommendation.

25

Franklin India Prima Plus

Fund Description Open-end diversified equity fund investing predominantly in Growth Blend Value
large cap stocks with some exposure to mid/small cap stocks
Large
Inception Date September 29, 1994
Medium
Assets Rs. 1,827.26 crores (Jul 31, 2012)

Managed by Anand Radhakrishnan, R. Janakiraman Small

Investment Style Primarily ‘growth’
Style Consistency

Salient Points Has a long track performance track record of 18years plus !
Focuses on

Wealth creating companies (generate return on capital in
excess of their cost of capital) with high growth
High growth companies in emerging sectors
Typically large/mid cap stock ratio of 80/20
Suitable for investors having moderate to aggressive risk
profile with an investment horizon of at least 3 years

Source: Morningstar Since Inception to Jun
2012

26


Top 10 holdings Sector Share of Top Sector Allocation Share of


Bharti Airtel Telecom – Services 6.52% Pharmaceuticals 12.09%

Infosys Software 5.51% Telecom – Services 8.33%

HDFC Bank Banks 5.03% Software 7.33%

Grasim Industries Cement 4.59% Cement 6.78%
Indus Ind Bank Banks 3.00% Auto Ancillaries 4.78%
Kotak Mahindra Bank Banks 2.83% Consumer Non Durables 4.61%
Reliance Industries Petroleum Products 2.65% Auto 4.45%
Dr. Reddy's Pharmaceuticals 2.64% Petroleum Products 4.33%
Bosch Auto Ancillaries 2.34% Minerals/Mining 3.93%
Total 43.11% Total 78.97%
As of Jul 31, 2012


27


Growth Plan NAV as at June 29, 2012: (Rs.) 217.1948 Fund Manager: Anand Radhakrishnan, R. Janakiraman
Growth Plan NAV Per FIPP S&P CNX 500 S&P CNX Nifty
Unit (Rs.)
Last 2 years 10,706 9,434 9,937
Last 3 years 14,053 12,020 12,302
Last 5 years 13,921 11,503 12,224
Last 10 years 95,303 53,965 49,905
Last 15 years 288,057 54,637 44,271
Since inception (29.09.94) 217,195 38,326 40,253
Past performance may or may not be sustained in future. Load is not taken into consideration. Dividends assumed to be
reinvested and Bonus is adjusted. Refer annexure for performance of other funds managed by the fund manager/s. Returns greater
than 1 year period are compounded annualized.

28


Date FIPP S&P CNX 500 S&P CNX Nifty
Inception 29-Sep-94 N.A. N.A. N.A.
Fall 04-Dec-96 -41.20% -51.26% -39.90%
Rise 05-Aug-97 43.03% 58.98% 61.54%
Fall 20-Oct-98 4.40% -33.87% -36.48%
Tech rally peak 11-Feb-00 277.33% 176.49% 117.14%
11/9 impact 21-Sep-01 -53.70% -64.60% -51.36%
Recovery 14-Jan-04 240.68% 197.02% 132.05%
Pre-crisis Peak 08-Jan-08 71.93% 70.16% 67.49%
Market Peak 09-Nov-10 155.14% 164.30% 144.90%
Current 29-Jun-12 -10.00% -19.77% -16.23%



29


Performance Attribution By Sector – 1 year ended July 2012

Consumer Discretionary ‐2.40
Utilities ‐0.62
Information Technology ‐0.39
Energy ‐0.32
Industrials ‐0.04
Health Care 1.06
Materials 2.22
Financials 2.62

‐4.00 ‐3.00 ‐2.00 ‐1.00 ‐‐ 1.00 2.00 3.00


30

CRISIL India’s largest ratings agency with strong parentage (Standard & Poor’s)
Well-placed to gain from increased activity in the capital markets and policy changes driving
expansion of service offerings

Grasim Industries One of the largest players in cement and near monopoly in viscose staple fibre in India
Is a value buy within the cement space and its VSF business offers downside protection
during downcycles in cement
HDFC Bank Amongst the largest Indian private banks and has a strong retail franchise
TV18 Broadcast Pan-media house with dominant presence in broadcasting and strong bouquet of offerings
Underperformance led by concerns about slowing ad spends and debt levels
Bharti Airtel Leading wireless telephony company
Well placed to benefit from any consolidation in the industry and rising penetration of
Infosys One of the largest software companies in India and a key beneficiary of the outsourcing
trend
Stock has been under pressure as challenging demand environment weighs on earnings

Past performance does not guarantee future results. Source: FactSet. Information is historical and may not reflect
current or future portfolio characteristics. All portfolio holdings are subject to change. The information stated above does not
constitute an investment advice or recommendation.

31

Franklin India Flexi Cap Fund

Fund Description Open-end fund with the flexibility to buy into companies
Growth Blend Value
across market caps
Large
Inception Date March 2, 2005
Medium
Assets Rs. 1,643.60 crores (July 31, 2012)

Managed by K.N. Sivasubramanian, Anand Vasudevan Small

Investment Style Blend of ‘growth’ and ‘value’

Salient Points Portfolio well-diversified across sectors - blends the
typically more volatile, mid/small cap stocks with
large caps, that tend to be more stable

Has the ability to capture growth potential across big
and small companies in a comprehensive manner

Given its diversified nature, ideal as a core holding of
all equity portfolios

32


Top 10 holdings Sector Share of Top Sector Allocation Share of

Bharti Airtel Telecom – Services 8.88% Pharmaceuticals 12.59%
Axis Bank Banks 7.25% Telecom - Services 8.88%
Dr. Reddy's Laboratories Pharmaceuticals 4.75% Power 7.28%
HDFC Bank Banks 6.06% Auto 6.30%
Yes Bank Banks 3.77% Cement 4.24%
Infosys Software 3.17% Auto Ancillaries 3.55%
Oil & Natural Gas Corp. Auto 3.07% Software 3.17%
Power Grid Corporation Power 2.99% Oil 3.07%
Mahindra & Mahindra Auto 2.98% Gas 3.02%
Total 51.99% Total 77.17%
As of July 31, 2012


33


Growth Plan NAV as at June 29, 2012: (Rs.) 30.8875 Fund Manager: KN Sivasubramanian, Anand Vasudevan

Growth Plan NAV FIFCF S&P CNX 500 S&P CNX Nifty
Per Unit (Rs.)
Last 2 years 10,094 9,434 9,937
Last 3 years 13,501 12,020 12,302
Last 5 years 13,132 11,503 12,224
Since inception (2.03.2005) 30,104 22,849 25,219

Past performance may or may not be sustained in future. Load is not taken into consideration. Dividends assumed to be reinvested and
Bonus is adjusted. Refer annexure performance of other funds managed by the fund manager/s. Returns greater than 1 year period are
compounded annualized.

34


Date FIFCF S&P CNX 500 S&P CNX Nifty

Inception 2-Mar-05 N.A N.A N.A
Precrisis Peak 08-Jan-08 57.17% 70.16% 67.49%
Market Peak 09-Nov-10 194.89% 164.30% 144.90%
Current 29-Jun-12 -17.85% -19.77% -16.23%


35


Performance Attribution By Sector – 1 year ended July 2012

Consumer Discretionary ‐2.71


Utilities ‐1.31

Industrials ‐1.27

Energy ‐0.21

Information Technology 0.13



Financials 0.77

Materials 1.04

Health Care 1.66

‐3.00 ‐2.00 ‐1.00 ‐‐ 1.00 2.00


36


Amara Raja Batteries Leading player in Indian storage battery industry
Play on the rising demand for automotives and telecom/ industrial growth

HDFC Bank Amongst the largest Indian private banks and have a strong retail franchise
IPCA Laboratories A fully-integrated mid-size pharma company with a diversified revenue mix
Re-rating potential - improving business mix, benefits from backward integration and
healthy balance sheet

TV18 Broadcast Pan-media house with dominant presence in broadcasting business and strong
bouquet of offerings
Underperformance led by concerns about debt levels and inter-group restructuring
Infosys One of the largest software companies in India and a key beneficiary of the outsourcing
trend
Stock has been under pressure as challenging demand environment weighs on earnings
Bharti Airtel Leading wireless telephony company
Well placed to benefit from any consolidation in the industry and rising penetration of

Past performance does not guarantee future results. Source: FactSet. Information is historical and may not reflect current or future portfolio
characteristics. All portfolio holdings are subject to change. The information stated above does not constitute an investment advice or recommendation.

37

Summary

Cautious optimism in global markets on hopes of policy support
India like other EMs has witnessed a slowdown in economic growth
Growth likely to remain modest over the coming year or so as domestic and global factors play out
There’s more headroom for monetary easing now but fiscal situation remains a concern
Long-term growth story remains intact - an interplay of consumption & investment
Corporate India remains in good shape – even as near term RoE trends impacted by cost
pressures
Current valuations offer good investment opportunities, especially bottom-up basis
FT has a range of offerings with strong track record to suit different risk profiles
One of the largest buy side teams – senior managers and analysts have been together for more than 16
years
Tune-out short-term noise and focus on long-term potential
Ignore momentum stories that reflect short-term trends and focus on building a portfolio of companies
that are creating value for their shareholders
Bluechip, Flexi Cap and Prima Plus funds have a long track record and have performed well across
market cycles

38

Risk factors

Scheme Classification and Objective: Franklin India Bluechip Fund (FIBCF) is an open ended growth
scheme with an objective to primarily provide medium to long term capital appreciation. Franklin India Flexi
Cap Fund (FIFCF): An open-end diversified equity fund that seeks to provide medium to long-term capital
appreciation by investing in stocks across the entire market capitalization range. Franklin India Prima Plus
(FIPP) is an open end growth fund with an objective to provide growth of capital plus regular dividend
through a diversified portfolio of equities, fixed income securities and money market instruments. Load
Structure: FIBCF,FIPP FIFCF: Entry Load: Nil: Exit Load: In respect of each purchase of Units - 1% if the
Units are redeemed/switched-out within one year of allotment. Risk Factors: Mutual Fund investments are
subject to market risks, read all scheme related documents carefully. The NAVs of the schemes may
go up or down depending upon the factors and forces affecting the securities market. The Mutual Fund is not
guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability
and adequacy of distributable surplus. The past performance of the mutual funds managed by the Franklin
Templeton Group and its affiliates is not necessarily indicative of future performance of the schemes.

SCHEME PERFORMANCE
Franklin India Bluechip Fund (FIBCF) - Growth Option Jun 30, 2009 to Jun 30, 2010 175.4872 50.57% 27.41% 23.80%
NAV as at June 29, 2012: (Rs.) 209.5208 Compounded Annualised Growth Rate Performance
Fund Manager: Anand Radhakrishnan, Anand Vasudevan Last 2 years (Jun 30, 2010 to Jun 29, 2012) 0.09% -2.87% -0.32%
NAV Per Unit (Rs.) FIBCF BSE Sensex S&P CNX Nifty Last 3 years (Jun 30, 2009 to Jun 29, 2012) 14.68% 6.33% 7.15%
Discrete 12 months performance Last 5 years (Jun 29, 2007 to Jun 29, 2012) 226.7622 3.14% 2.84% 4.09%
Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 216.5858 -3.26% -7.51% -6.53% Last 10 years (Jun 28, 2002 to Jun 29, 2012) 29.10 24.68% 18.34% 17.42%
Jun 30, 2010 to Jun 30, 2011 196.4388 10.26% 6.47% 6.30% Last 15 years (Jun 30, 1997 to Jun 29, 2012) 10.06 24.34% 11.98% 10.42%
Jun 30, 2009 to Jun 30, 2010 151.4629 29.69% 22.13% 23.80% Since inception till Jun 29, 2012 10 19.27% 8.97% 9.32%
Compounded Annualised Growth Rate Performance Current Value of Standard Investment of Rs 10000
Last 2 years (Jun 30, 2010 to Jun 29, 2012) 3.28% -0.77% -0.32% Last 2 years 10018 9434 9937
Last 3 years (Jun 30, 2009 to Jun 29, 2012) 11.42% 6.34% 7.15% Last 3 years 15083 12020 12302
Last 5 years (Jun 29, 2007 to Jun 29, 2012) 142.4306 8.02% 3.53% 4.09% Last 5 years 11673 11503 12224
Since inception till Jun 29, 2012 10 23.46% 9.38% 9.32% Since inception (1.12.1993) 264695 49412 52372
Current Value of Standard Investment of Rs 10000
Franklin India Flexi Cap Fund (FIFCF) - Growth Option
Last 2 years 10666 9847 9937
NAV as at June 29, 2012: (Rs.) 30.1038
Last 3 years 13833 12026 12302
Fund Manager: K. N. Sivasubramanian, Anand Vasudevan
Last 5 years 14710 11897 12224
NAV Per Unit (Rs.) FIFCF S&P CNX 500 S&P CNX Nifty
Last 10 years 95454 53718 49905
Discrete 12 months performance
Last 15 years 308854 40953 44271
Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 32.7142 -7.98% -7.79% -6.53%
Since inception (1.12.1993) 502687 52946 52372
Jun 30, 2010 to Jun 30, 2011 29.8221 9.70% 2.31% 6.30%
Templeton India Growth Fund (TIGF) - Dividend Option Jun 30, 2009 to Jun 30, 2010 22.2975 33.75% 27.41% 23.80%
Fund Manager: Dr. J. Mark Mobius Last 2 years (Jun 30, 2010 to Jun 29, 2012) 0.47% -2.87% -0.32%
NAV Per Unit (Rs.) TIGF BSE Sensex MSCI India Value S&P CNX Nifty Last 3 years (Jun 30, 2009 to Jun 29, 2012) 10.52% 6.33% 7.15%
Discrete 12 months performance Last 5 years (Jun 29, 2007 to Jun 29, 2012) 22.9236 5.59% 2.84% 4.09%
Jun 30, 2011 to Jun 29, 2012 (Last 1 year)50.6031 -8.24% -7.51% -12.03% -6.53% Since inception till Jun 29, 2012 10 16.22% 11.93% 13.45%
Jun 30, 2010 to Jun 30, 2011 53.7310 1.89% 6.47% -0.70% 6.30% Current Value of Standard Investment of Rs 10000
Jun 30, 2009 to Jun 30, 2010 40.0034 42.61% 22.13% 31.32% 23.80% Last 2 years 10094 9434 9937
Compounded Annualised Growth Rate Performance Last 3 years 13501 12020 12302
Last 2 years (Jun 30, 2010 to Jun 29, 2012) -3.31% -0.77% -6.53% -0.32% Last 5 years 13132 11503 12224
Last 3 years (Jun 30, 2009 to Jun 29, 2012) 10.07% 6.34% 4.68% 7.15% Since inception (2.3.2005) 30104 22849 25219
Last 5 years (Jun 29, 2007 to Jun 29, 2012) 43.7906 7.59% 3.53% 4.42% 4.09%
Franklin India Opportunities Fund (FIOF) - Growth Option
NAV as at June 29, 2012: (Rs.) 28.8213
Fund Manager: Chakri Lokapriya, Anil Prabhudas
Since inception till Jun 29, 2012 10 16.96% 10.82% N.A 11.09%
NAV Per Unit (Rs.) FIOF BSE 200 # S&P CNX Nifty
Last 2 years 9350 9847 8736 9937
Last 3 years 13334 12026 11472 12302
Jun 30, 2010 to Jun 30, 2011 29.7045 5.08% 2.96% 6.30%
Last 5 years 14419 11897 12418 12224
Jun 30, 2009 to Jun 30, 2010 24.4161 21.66% 27.22% 23.80%
Last 10 years 81558 53718 58695 49905
Compounded Annualised Growth Rate Performance
Last 15 years 100621 40953 35755 44271
Last 2 years (Jun 30, 2010 to Jun 29, 2012) -1.50% -2.48% -0.32%
since inception (10.9.1996) 119035 50745 N.A 52728
Last 3 years (Jun 30, 2009 to Jun 29, 2012) 5.68% 6.56% 7.15%
Franklin India Prima Plus (FIPP) - Growth Option Last 5 years (Jun 29, 2007 to Jun 29, 2012) 28.6254 0.14% 3.44% 4.09%
NAV as at June 29, 2012: (Rs.) 217.1948 Last 10 years (Jun 28, 2002 to Jun 29, 2012) 4.65 19.99% 13.34% 17.42%
Fund Manager: Anand Radhakrishnan, R. Janakiraman Since inception till Jun 29, 2012 10 8.94% -3.64% 9.33%
NAV Per Unit (Rs.) FIPP S&P CNX 500 S&P CNX Nifty Current Value of Standard Investment of Rs 10000
Discrete 12 months performance Last 2 years 9703 9511 9937
Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 223.3016 -2.73% -7.79% -6.53% Last 3 years 11804 12100 12302
Jun 30, 2010 to Jun 30, 2011 202.8684 10.07% 2.31% 6.30% Last 5 years 10068 11847 12224
Compounded Annualised Growth Rate Performance Since inception (21.2.2000) 28821 6327 30105
Last 2 years (Jun 30, 2010 to Jun 29, 2012) 3.47% -2.87% -0.32% # Index adjusted for the period February 21, 2000 to March 10, 2004 with the performance of ET Mindex.
Last 5 years (Jun 29, 2007 to Jun 29, 2012) 156.0141 6.83% 2.84% 4.09% Templeton India Equity Income Fund (TIEIF) - Growth Option
Last 10 years (Jun 28, 2002 to Jun 29, 2012) 22.79 25.26% 18.34% 17.42% NAV as at June 29, 2012: (Rs.) 19.1752
Last 15 years (Jun 30, 1997 to Jun 29, 2012) 7.54 25.10% 11.98% 10.42% Fund Manager: Dr. J. Mark Mobius assisted by Chetan Sehgal
Since inception till Jun 29, 2012 10 18.92% 7.86% 8.16% NAV Per Unit (Rs.) TIEIF BSE 200 S&P CNX Nifty
Current Value of Standard Investment of Rs 10000 Discrete 12 months performance
Last 2 years 10706 9434 9937 Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 20.5014 -6.47% -7.63% -6.53%
Last 3 years 14053 12020 12302 Jun 30, 2010 to Jun 30, 2011 18.2134 12.56% 2.96% 6.30%
Last 5 years 13921 11503 12224 Jun 30, 2009 to Jun 30, 2010 13.4542 35.37% 27.22% 23.80%
Last 10 years 95303 53965 49905 Compounded Annualised Growth Rate Performance
Last 15 years 288057 54637 44271 Last 2 years (Jun 30, 2010 to Jun 29, 2012) 2.61% -2.48% -0.32%
Since inception (29.9.1994) 217195 38326 40253 Last 3 years (Jun 30, 2009 to Jun 29, 2012) 12.54% 6.56% 7.15%
Franklin India Prima Fund (FIPF) - Growth Option Last 5 years (Jun 29, 2007 to Jun 29, 2012) 13.4733 7.30% 3.44% 4.09%
NAV as at June 29, 2012: (Rs.) 264.6954 Since inception till Jun 29, 2012 10 11.22% 7.07% 7.51%
Fund Manager: R. Janakiraman, K. N. Sivasubramanian Current Value of Standard Investment of Rs 10000
NAV Per Unit (Rs.) FIPF S&P CNX 500 S&P CNX Nifty Last 2 years 10528 9511 9937
Jun 30, 2010 to Jun 30, 2011 264.2304 3.56% 2.31% 6.30% Since inception (18.5.2006) 19175 15191 15577

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SCHEME PERFORMANCE
Franklin Asian Equity Fund (FAEF) - Growth Option Jun 30, 2009 to Jun 30, 2010 143.1573 32.83% 27.41% 23.80%
Fund Manager: Roshi Jain Last 2 years (Jun 30, 2010 to Jun 29, 2012) 5.33% -2.87% -0.32%
NAV Per Unit (Rs.) FAEF MSCI Asia S&P CNX Nifty Last 3 years (Jun 30, 2009 to Jun 29, 2012) 13.80% 6.33% 7.15%
(ex Japan) Last 5 years (Jun 29, 2007 to Jun 29, 2012) 139.5850 8.60% 2.84% 4.09%
Standard Index Last 10 years (Jun 28, 2002 to Jun 29, 2012) 24.5 24.00% 18.34% 17.42%
Discrete 12 months performance Since inception till Jun 29, 2012 10 25.92% 14.51% 13.46%
Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 11.1221 6.35% 5.14% -6.53% Current Value of Standard Investment of Rs 10000
Compounded Annualised Growth Rate Performance Last 5 years 15115 11503 12224
Last 2 years (Jun 30, 2010 to Jun 29, 2012) 9.57% 11.50% -0.32% Last 10 years 86117 53965 49905
Last 3 years (Jun 30, 2009 to Jun 29, 2012) 10.17% 12.96% 7.15% Since inception (10.4.1999) 210987 60072 53140
Since inception till Jun 29, 2012 10 3.84% 4.05% -2.60%
Last 2 years 12006 12433 9937 Franklin India Index Fund Nifty Plan (FIIF-Nifty Plan) - Growth Option
Last 3 years 13370 14415 12302 NAV as at June 29, 2012: (Rs.) 41.6244
Since inception (16.1.2008) 11828 11934 8893 Fund Manager: Anil Prabhudas
NAV Per Unit (Rs.) FIIF - Nifty Plan S&P CNX Nifty
Franklin India High Growth Companies Fund (FIHGCF) - Growth Option Discrete 12 months performance
NAV as at June 29, 2012: (Rs.) 11.9437 Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 44.4691 -6.40% -6.53%
Fund Manager: K. N. Siva Subramanian, Roshi Jain Jun 30, 2010 to Jun 30, 2011 41.8199 6.33% 6.30%
NAV Per Unit (Rs.) FIHGCF S&P CNX 500 S&P CNX Nifty Jun 30, 2009 to Jun 30, 2010 33.7031 24.08% 23.80%
Discrete 12 months performance Compounded Annualised Growth Rate Performance
Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 12.8575 -7.11% -7.79% -6.53% Last 2 years (Jun 30, 2010 to Jun 29, 2012) -0.23% -0.32%
Jun 30, 2010 to Jun 30, 2011 12.0471 6.73% 2.31% 6.30% Last 3 years (Jun 30, 2009 to Jun 29, 2012) 7.29% 7.15%
Jun 30, 2009 to Jun 30, 2010 8.7659 37.43% 27.41% 23.80% Last 5 years (Jun 29, 2007 to Jun 29, 2012) 34.4184 3.87% 4.09%
Compounded Annualised Growth Rate Performance Last 10 years (Jun 28, 2002 to Jun 29, 2012) 8.01 17.89% 17.42%
Last 2 years (Jun 30, 2010 to Jun 29, 2012) -0.43% -2.87% -0.32% Since inception till Jun 29, 2012 10 12.72% 12.35%
Last 3 years (Jun 30, 2009 to Jun 29, 2012) 10.86% 6.33% 7.15% Current Value of Standard Investment of Rs 10000
Since inception till Jun 29, 2012 10 3.67% 1.64% 2.74% Last 2 years 9953 9937
Current Value of Standard Investment of Rs 10000 Last 3 years 12350 12302
Last 2 years 9914 9434 9937 Last 5 years 12094 12224
Last 3 years 13625 12020 12302 Last 10 years 51966 49905
Since inception (26.7.2007) 11944 10836 11427 Since inception (4.8.2000) 41624 40036

Franklin India Index Fund BSE Plan (FIIF - BSE Plan) - Growth Option
Franklin India Smaller Companies Fund (FISCF) - Growth Option
NAV as at June 29, 2012: (Rs.) 49.2906
NAV as at June 29, 2012: (Rs.) 13.5247
Fund Manager: Anil Prabhudas
Fund Manager: R. Janakiraman, K. N. Sivasubramanian
NAV Per Unit (Rs.) FIIF - BSE Plan BSE Sensex S&P CNX Nifty
NAV Per Unit (Rs.) FISCF CNX Midcap S&P CNX Nifty
Jun 30, 2010 to Jun 30, 2011 49.8169 6.89% 6.47% 6.30%
Jun 30, 2010 to Jun 30, 2011 13.7126 4.06% -1.96% 6.30%
Jun 30, 2009 to Jun 30, 2010 40.7039 22.39% 22.13% 23.80%
Jun 30, 2009 to Jun 30, 2010 9.4570 45.00% 49.82% 23.80%
Last 2 years 9863 9042 9937
Last 2 years 9894 9847 9937
Last 3 years 14301 13546 12302
Last 3 years 12110 12026 12302
Last 5 years 11059 12303 12224
Last 5 years 12082 11897 12224
Since inception (13.1.2006) 13525 17454 18519
Last 10 years 49990 53718 49905
Since inception (27.8.2001) 49291 52527 49218
Franklin Build India Fund (FBIF) - Growth Option
NAV as at June 29 30, 2012: (Rs.) 11.2923 Franklin Infotech Fund (FIF) - Growth Option
Fund Manager: Anand Radhakrishnan, Roshi Jain NAV as at June 29, 2012: (Rs.) 62.4415
NAV Per Unit (Rs.) FBIF S&P CNX 500 S&P CNX Nifty Fund Manager: Anand Radhakrishnan
Discrete 12 months performance NAV Per Unit (Rs.) FIF BSE IT Index S&P CNX Nifty
Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 11.5538 -2.26% -7.79% -6.53% Discrete 12 months performance
Jun 30, 2010 to Jun 30, 2011 12.0090 -3.79% 2.31% 6.30% Jun 30, 2011 to Jun 29, 2012 (Last 1 year) 64.9739 -3.90% -5.49% -6.53%
Compounded Annualised Growth Rate Performance Jun 30, 2010 to Jun 30, 2011 56.5424 14.91% 14.68% 6.30%
Last 2 years (Jun 30, 2010 to Jun 29, 2012) -3.03% -2.87% -0.32% Jun 30, 2009 to Jun 30, 2010 34.6965 62.96% 61.82% 23.80%
Since inception till Jun 29, 2012 10 4.41% 2.99% 4.36% Compounded Annualised Growth Rate Performance
Current Value of Standard Investment of Rs 10000 Last 2 years (Jun 30, 2010 to Jun 29, 2012) 5.09% 4.11% -0.32%
Last 2 years 9403 9434 9937 Last 3 years (Jun 30, 2009 to Jun 29, 2012) 21.64% 20.59% 7.15%
Since inception (4.9.2009) 11292 10867 11279 Last 5 years (Jun 29, 2007 to Jun 29, 2012) 50.6014 4.29% 3.43% 4.09%
Franklin India Taxshield (FIT) - Growth Option Since inception till Jun 29, 2012 10 19.98% N.A 14.03%
NAV as at June 29, 2012: (Rs.) 210.9867 Current Value of Standard Investment of Rs 10000
Fund Manage:r Anand Radhakrishnan, Anil Prabhudas Last 2 years 11043 10838 9937
NAV Per Unit (Rs.) FIT S&P CNX 500 S&P CNX Nifty Last 3 years 17996 17538 12302
Jun 30, 2010 to Jun 30, 2011 190.1618 11.75% 2.31% 6.30% Since inception (22.8.1998) 124900 N.A 61709

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Franklin Templeton Quarterly Report - Equity Report - August 2012

Franklin Templeton Quarterly Report - Equity Report - August 2012

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Franklin Templeton Quarterly Report - Equity Report - August 2012